Trump Delays Auto Tariffs For 6 Months

New cars sit in a lot at the Port of Richmond in California on May 24, 2018. The Trump administration on Friday announced a six-month delay in setting new tariffs on auto imports.
New cars sit in a lot at the Port of Richmond in California on May 24, 2018. The Trump administration on Friday announced a six-month delay in setting new tariffs on auto imports.
Justin Sullivan/Getty Images

The Trump administration will delay tariffs on cars and auto parts imports for six months while it negotiates trade deals with Japan and the European Union, the White House announced Friday.

President Trump said that Commerce Secretary Wilbur Ross has concluded "that the present quantities and circumstances of automobile and certain automobile parts imports threaten to impair" national security, giving the president the authority to declare tariffs or quotas. Trump cited the same "Section 232" authority that he used to impose tariffs on steel and aluminum.

The administration had set a Saturday deadline to decide whether to impose tariffs on autos over national security concerns. But instead of taking immediate action,the president is calling for new trade agreements to be negotiated.

His executive order does not specify what tariffs would be imposed if negotiations fail, but industry experts have anticipated tariffs as high as 25 percent.

The auto industry has been united in opposition to the tariffs, which would hurt American automakers as well as rivals abroad. Every car made today involves a complex global supply chain, with thousands of parts sourced from around the world, so even U.S.-made components and vehicles would be affected by steep tariffs.

An analysis by the Center for Automative Research found that raising tariffs on imports would increase new car prices by thousands of dollars and reduce new car sales by more than a million units a year.

Industry experts also say hundreds of thousands of jobs would be lost — and that's without factoring in retaliatory tariffs.

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